United States: Analysis And Impact Of The Improving Medicare Post-Acute Care Transformation Act Of 2014

This week, President Obama signed into law the Improving
Medicare Post-Acute Care Transformation Act of 2014 (the
"IMPACT Act" or "Act").1 The IMPACT
Act's provisions will affect a broad range of post-acute care
("PAC") providers: home health agencies
("HHAs"), skilled nursing facilities ("SNFs"),
inpatient rehabilitation facilities ("IRFs"), and
long-term acute care hospitals ("LTCHs"). Various facets
of daily operations of these PAC providers will change as a result
of the Act: what information PAC providers must collect and report,
the information the public will receive about PAC providers, and
even the method of determining future Medicare payments to PAC
providers, among others.

Policymakers have long expressed concerns with the disparate
methods of paying for PAC services that may, to some degree, be
substitutes for one another or complements to each
other.2 According to the preamble of the bill, the Act
is intended to provide standardized assessment data for quality
improvement, payment, and discharge planning purposes across the
spectrum of PAC providers.

The IMPACT Act has four stages of implementation: (1) the data
collection, reporting, and analysis stage; (2) the feedback report
stage; (3) the public report stage; and (4) the Congressional
report stage. First, the PAC providers affected by the IMPACT Act
must collect and report various types of data on Medicare
beneficiaries in their care using prescribed assessment
instruments. The Secretary of Health and Human Services
("HHS"), and more likely her designee, the Centers for
Medicare & Medicaid Services ("CMS"), then analyzes
that data. Second, the Secretary provides the PAC providers with a
feedback report, analyzing the PAC providers' performance on
the metrics measured. Third, the Secretary releases the data on the
PAC providers' performance to the public. Finally, the
Secretary and the Medicare Payment Advisory Commission
("MedPAC") submit reports to Congress recommending future
payment plans for PAC providers, and analyzing their effect on the
metrics measured, as well as any financial effects.

The IMPACT Act could significantly increase the burden on PAC
providers to maintain and report more data and clinical measures on
each individual patient. At the same time, the law gives the
Secretary some discretion in adding or removing factors from the
collection, analysis, and reporting mandated, which presents PAC
providers with the opportunity to work with CMS on the development
and implementation of the new reporting systems. In the long-term,
the IMPACT Act aims to provide a foundation of data upon which
Congress can debate possible changes to the Medicare payment system
for PAC providers.

In addition to the above-noted data collection and reporting
provisions, the IMPACT Act makes several changes important to
Medicare-certified hospice programs, including more frequent
surveys, clarification on when medical reviews are performed, and a
change in the annual process to calculate the payment cap that
limits each hospice provider's aggregate Medicare payments per
year.

DATA COLLECTION, REPORTING, AND ANALYSIS

Under the IMPACT Act, PAC providers must collect and report to
HHS standardized and interoperable patient assessment data, quality
measures, and resource use measures. Rather than mandate a single
assessment tool for all PAC providers, the Act requires the use of
separate, but uniform, assessment instruments to collect and report
the patient assessment data, quality measures, and resource use
measures.3 This approach is intended to facilitate the
submission of standardized data, capable of comparison across all
PAC providers (i.e., interoperability).

HHAs must collect and report the data and measures using the
Outcome and Assessment Information Set, commonly referred to as
OASIS.4 SNFs must collect and report the data and
measures using the Resident Assessment Instrument/Minimum Data
Set.5 IRFs must collect and report the data and measures
using the IRF-Patient Assessment Instrument. LTCHs must collect and
report data and measures using the LTCH-Continuity Assessment
Record and Evaluation.

Reporting Patient Assessment Data

PAC providers must begin reporting patient assessment data in a
standardized and interoperable format according to a specific
schedule outlined in the Act. SNFs, IRFs, and LTCHs must begin
reporting this data no later than October 1, 2018. HHAs must begin
reporting this data no later than January 1, 2019.

The standardized and interoperable patient assessment data that
PAC providers must report are defined as, at least: (1) functional
status; (2) cognitive function and mental status; (3) special
services, treatments, and interventions required; (4) medical
conditions; and (5) impairments. The Secretary is granted the
authority to require reporting of other categories of patient
assessment data as deemed necessary and appropriate. PAC providers
must report this data at admission and discharge of a patient, and
more frequently if the Secretary deems appropriate.

The Secretary will match any available claims data for
individual patients with their assessment data. For SNFs, IRFs, and
LTCHs, the Secretary will match this data by October 1, 2018, to
the extent practicable. For HHAs, the Secretary will match the data
by January 1, 2019, to the extent practicable. The Secretary will
use this matched data for the purpose of assessing prior service
use and concurrent service use, and the Secretary may also use the
data for other uses deemed appropriate. The Secretary and HHS
cannot, however, use the matched claims and assessment data to
require that individuals receive post-acute care from a specific
type of provider to be eligible for payment.

Reporting Quality Measures and Resource Use Measures

In addition to the patient assessment data, PAC providers must
begin reporting quality measures and resource use measures in a
standardized and interoperable format.

Quality Measures Defined

The quality measures that PAC providers must report are defined
as, at least:

Functional status and cognitive
function, and changes in function

Skin integrity and changes in skin
integrity

Medication reconciliation

Incidence of major falls

Accurately communicating the
existence of, and providing for, the transfer of an
individual's health information and care preferences to the
individual and others in charge of caring for, or providing
services for, the individual when:

The individual transitions from a
hospital or critical access hospital to another PAC provider or the
individual's home, or

The individual transitions from a PAC
provider to another applicable setting (including a different PAC
provider, a hospital, a critical access hospital, or the home of
the individual)

The Secretary may require reporting other necessary quality
measures data. The Secretary also may remove, suspend, or add a
quality measure or resource use measure, as long as the Secretary
publishes a justification in the Federal Register.

The timelines for PAC providers to begin reporting on quality
measures is summarized below in Table 1.

Table 1: Timeline
for Reporting Quality Measures

Quality
Measures

HHAs

SNFs

IRFs

LTCHs

Functional
Status

1/1/2019

10/1/2016

10/1/2016

10/1/2018

Skin Integrity

1/1/2017

10/1/2016

10/1/2016

10/1/2016

Medication
Reconciliation

1/1/2017

10/1/2018

10/1/2018

10/1/2018

Major Falls

1/1/2019

10/1/2016

10/1/2016

10/1/2016

Patient Health Information
and Preference

1/1/2019

10/1/2018

10/1/2018

10/1/2018

Resource Use Measures Defined

The resource use measures that PAC providers must report are
defined as, at least: (1) total estimated Medicare spending per
beneficiary; (2) discharge to community; and (3) measures to
reflect all-condition, risk-adjusted, potentially preventable
hospital readmission rates. The Secretary may require reporting of
other categories of resource use measures as deemed necessary.

SNFs, IRFs, and LTCHs must begin reporting resource use measures
in a standardized and interoperable format no later than October 1,
2016. HHAs must begin reporting resource use measures no later than
January 1, 2017, as indicated in the following table:

Table 2: Timeline
for Reporting Resource Measures

Resource Use
Measures

HHAs

SNFs

IRFs

LTCHs

Resource Use
Measures

1/1/2017

10/1/2016

10/1/2016

10/1/2016

Discharge to
Community

1/1/2017

10/1/2016

10/1/2016

10/1/2016

Readmission
Rates

1/1/2017

10/1/2016

10/1/2016

10/1/2016

Risk Adjustment of Measures

The Secretary will adjust the quality measures and resource use
to account for clinical risk factors (e.g., age, co-morbid
conditions, severity of illness), as the Secretary deems
appropriate. Accounting for patients' risk factors is intended
to facilitate more accurate comparison of statistics, such as the
hospitalization rate of PAC patients, furthering the Act's
purpose of providing standardized and interoperable PAC assessment
data.

Consensus-Based Entity to Endorse Measures

Quality measures and resource use and other measures reported by
PAC providers must be endorsed by a consensus-based entity with a
contract under section 1890(a) of the Social Security Act (SSA),
such as the National Quality Forum.6

PAC Providers That Fail to Report Will Be Subject to a
Reduction in Market Basket Prices

Beginning with the specified dates listed in Table 1 and Table 2
above, HHAs, IRFs, LTCHs, and SNFs that fail to report quality
measures and resource use and other measures will be subject to a
two percentage point reduction in market basket prices in effect
under the existing provisions of the SSA.7 Similarly,
beginning in 20198, HHAs, IRFs, and LTCHs that do not
provide the required patient assessment data will be subject to the
same two percentage point reduction under the SSA. Additionally,
beginning with the fiscal year 2018, for SNFs that do not provide
patient assessment data, the Secretary will reduce the SNF's
market basket update by the same two percentage points. The
reduction in percentage may result in a market basket update of
less than zero. Any reduction is limited to that fiscal year, thus,
reductions are not cumulative.

Utilizing Quality Measures and Resource Use Measures in
Discharge Planning

The Secretary must promulgate regulations by January 1, 2016
that will require PAC providers to take certain factors into
account in the discharge planning process: (1) quality measures;
(2) resource use measures; and (3) other measures under the
applicable reporting provisions. Specifically, these regulations
and interpretive guidance will address the settings to which a
patient may be discharged in order to aid the transition for the
beneficiary. The regulations and interpretive guidance will also
address the treatment preferences of patients; and the goals of
care of patients.

PROVIDER FEEDBACK STAGE

Beginning one year after the dates that PAC providers must begin
reporting quality measures and resource use measures, the Secretary
will provide confidential feedback reports to the PAC providers on
their performance regarding these measures.9 If
possible, the Secretary will provide these confidential feedback
reports at least on a quarterly basis. If the PAC providers report
measures on an annual basis, the Secretary may provide them
confidential feedback reports annually.

Table 3: Timeline
for Feedback Reports on Quality Measures

Quality Domains

HHAs

SNFs

IRFs

LTCHs

Functional
Status

1/1/2020

10/1/2017

10/1/2017

10/1/2019

Skin Integrity

1/1/2018

10/1/2017

10/1/2017

10/1/2017

Medication
Reconciliation

1/1/2018

10/1/2019

10/1/2019

10/1/2019

Major Falls

1/1/2020

10/1/2017

10/1/2017

10/1/2017

Patient Health Information
and Preference

1/1/2020

10/1/2019

10/1/2019

10/1/2019

Table 4: Timeline
for Feedback Reports on Resource Measures

Resource Use
Measures

HHAs

SNFs

IRFs

LTCHs

Resource Use
Measures

1/1/2018

10/1/2017

10/1/2017

10/1/2017

Discharge to
Community

1/1/2018

10/1/2017

10/1/2017

10/1/2017

Readmission
Rates

1/1/2018

10/1/2017

10/1/2017

10/1/2017

PUBLIC REPORTING STAGE

The Secretary will then create procedures for making public the
information regarding performance under the measures. Under these
procedures, a PAC provider will have the opportunity to review and
submit corrections to the data and information before it is made
public. The information must be made public beginning no later than
two years after the dates that PAC providers must begin reporting
quality measures and resource use measures.10

Table 5: Timeline
for Public Reports on Quality Measures

Quality
Measures

HHAs

SNFs

IRFs

LTCHs

Functional
Status

1/1/2021

10/1/2018

10/1/2018

10/1/2020

Skin Integrity

1/1/2019

10/1/2018

10/1/2018

10/1/2018

Medication
Reconciliation

1/1/2019

10/1/2020

10/1/2020

10/1/2020

Major Falls

1/1/2021

10/1/2018

10/1/2018

10/1/2018

Patient Health Information
and Preference

1/1/2021

10/1/2020

10/1/2020

10/1/2020

Table 6: Timeline
for Public Reports on Resource Measures

Resource Use
Measures

HHAs

SNFs

IRFs

LTCHs

Resource Use
Measures

1/1/2019

10/1/2018

10/1/2018

10/1/2018

Discharge to
Community

1/1/2019

10/1/2018

10/1/2018

10/1/2018

Readmission
Rates

1/1/2019

10/1/2018

10/1/2018

10/1/2018

CONGRESSIONAL REPORTING STAGE

The First MedPAC Report

MedPAC must submit a report to Congress regarding alternative
models for a PAC provider payment system. MedPAC is required to
evaluate and recommend features of future PAC payment systems that
establish, or a unified payment system that establishes, payment
rates according to individuals' characteristics instead of the
PAC setting in which individuals are treated. This report will be
submitted no later than June 30, 2016.

Secretary's Report

In consultation with MedPAC and appropriate stakeholders, the
Secretary will submit a report to Congress regarding alternative
models for a PAC provider payment system. The report will
include:

Recommendations on and a technical
prototype of a PAC prospective payment system that
would—

Base payments on individual
characteristics of the patient as opposed to the PAC setting

Account for clinical appropriateness
of items and services provided and the beneficiary outcomes

Incorporate standardized patient
assessment data received under prior sections of the IMPACT
Act

Further clinical integration

Recommendations on which Medicare
fee-for-service regulations for PAC payment systems should be
altered.

An analysis of the impact of the
recommended payment system on beneficiary cost-sharing, access to
care, and choice of setting.

A projection of any potential
reduction in expenditures that may be attributable to the
application of the recommended payment system.

A review of the value of subsection
(d) hospitals collecting and reporting to the Secretary
standardized patient assessment data for inpatient hospital
services furnished by such a hospital to Medicare
beneficiaries.

This report will be submitted no later than two years after the
Secretary has collected two years of data on quality measures.

The Second MedPAC Report

No later than the first June 30 following the Secretary's
report, MedPAC will submit a report to Congress, including
recommendations and a technical prototype for a PAC prospective
payment system that would satisfy the criteria required of the
prototype submitted in the Secretary's report.

HHS to Conduct Studies Concerning the Impact that
Individuals' Socioeconomic Status, Race, and Other Factors Have
Upon Quality and Resource Use

Not more than two years after the date of the IMPACT Act's
enactment, the Secretary is required to study (and report to
Congress) the effect of individuals' socioeconomic status on
quality measures and resource use and other measures. Not more than
five years after the date of the IMPACT Act's enactment, the
Secretary will submit a report on a study to Congress regarding the
impact of risk factors (such as race, health literacy, limited
English proficiency, and Medicare beneficiary activity on quality
measures and resource use and other measures).

CHANGES TO HOSPICE SURVEY AND MEDICAL REVIEW REQUIREMENTS

Survey Requirement

All Medicare-certified hospice programs will be subject to more
frequent surveys: no less frequently than once every 36 months,
beginning in April 2015 and ending September 30, 2025. The surveys
may be administered by an appropriate state or local survey agency,
or an approved accreditation agency, as determined by the
Secretary.

Medical Review of Certain Hospice Care

For PAC providers certified as hospice programs, the Act changes
the trigger for medical review of certain patients' care. The
Affordable Care Act required medical review of hospice stays
exceeding 180 days for hospices with an unusually large share of
long-stay patients. Under the IMPACT Act, medical review takes
place if the number of cases of patients receiving more than 180
days of care exceeds a percent of the total number of all cases of
individuals cared for by the hospice at issue. This means that the
trigger for such medical review of patients' hospice care will
be tailored to each individual hospice program.

Hospice Payment Cap

The Act also aligns hospice reimbursement and the hospice
aggregate financial cap to a common inflationary index.

CONCLUSION

The IMPACT Act imposes several new requirements upon PAC
providers in the coming years, and may have a significant effect on
the manner in which Congress addresses the question of how to
modify the PAC prospective payment systems.

Through its rule-making procedures, CMS is granted significant
authority to design and implement the new data collection and
reporting systems, each of which has the potential to present
challenges to PAC providers. Stakeholders, such as the American
Hospital Association, have already questioned whether the new
quality measures will be consistent with existing patient
assessment measures, and whether providers will face the challenge
of submitting multiple sets of distinct but similar measures.
Before the initial rulemaking to implement the IMPACT Act, the
Secretary must allow for stakeholder input—for example,
through town halls, open door forums, and mail-box submissions.
This is one way—in addition to notice-and-comment
rulemaking—for PAC providers to be involved in the Act's
implementation.

3. The Secretary must modify the PAC assessment
instruments as necessary to enable their use for the purposes
required by the Act; however, changes may not occur more than once
per calendar or fiscal year, unless the Secretary publishes a
justification for the modification in the Federal
Register.

As part of the proposed rule issued November 1, 2018 by the CMS regarding updates to the Medicare Advantage and Medicare prescription drug benefit programs, CMS addressed expanding the ability of MA plans ...

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